The U.S. open source software company Red Hat announced results for its fiscal first quarter 2014 this evening, reporting earnings per share of $0.32 on revenue of $363 million, right in line with Wall Street's expectations of $0.31 on $360 million.

The company's shares (RHT) were up 1 percent in after-hours trading.

Here's what you need to know for Q1:

That revenue figure was up 15 percent year over year

Subscription revenue was $316 million, up 16 percent year over year

Operating income (non-GAAP) was $87 million, up 7 percent year over year

Operating cash flow was $142 million, up 14 percent year over year

Operating margin (non-GAAP) was 23.9 percent.

The challenge that faces the company is simple to explain and difficult to solve: faced with competition from Microsoft, Amazon and VMware, can it make inroads in the growing public and private cloud markets?

Chief executive Jim Whitehurst says yes. "We continued to execute against our strategy of significantly expanding our addressable market in the new cloud-centric data center," he said in a statement.

In other words, it's a play for the long term. A look at the company's Q1 subscription revenue and R&D spending—focused on cloud management, its Linux OpenStack Platform and its OpenShift platform-as-a-service offering—reveals just that. Quarterly subscription revenue was $316 million, up 16 percent from Q1 last year, and R&D spending was $74 million, up from $60 million last year.